Comment Detail

Comment

Thank you for the opportunity to share the impact the FHLB has had on our community. I believe it is prudent to evaluate the success of any business plan on a regular basis and applaud the FHFA for initiating these listening sessions. I think it is vitally important to listen to the voices of the members. These are the banks that have capital at risk and who have utilized the FHLB system as it was designed to support home ownership by providing liquidity to insured financial institutions in a safe and sound manner.

First Federal Bank of Kansas City is an 88 year old $900 Million mutually owned savings bank. The bank came into existence just two years after the Federal Home Loan Bank system was formed. As a mutually owned financial institution we are owned by our depositors and were formed with a mission of encouraging and facilitating savings and home ownership. For 88 years we’ve been able to deliver on our mission in large part due to the Federal Home Loan Bank system. The FHLB has been a critical source of liquidity for the bank allowing us to extend home loans to more individuals and families than we could have done relying solely on customer deposits. They are able to offer member banks like us competitive rates because each advance has collateral and each bank is well capitalized. These are two critical components to the 90 years of success of the FHLB system and any attempt to deviate from this model could jeopardize the safety and soundness of the system.

By ensuring all borrowers/members of FHLB are regulated and have to adhere to not only the same safety and soundness rules and regulations but CRA and compliance regulations you ensure those consumers benefiting from the system are protected as well. Any attempt to allow unregulated entities access to the system could not only harm the consumer but also put the safety and soundness of the system at risk.

The communities we serve, specifically the low and moderate income communities we serve, have benefited from a strong FHLB system which provides critical home ownership grants and low cost liquidity to support funding for home loans. I would encourage you to be very cautious when considering changing the mission of the bank as you may negatively impact those communities that were specifically designated to benefit from it.

Over the 90 year history of the FHLB system there have been other attempts to expand its mission, which I am grateful have failed. If these listening sessions are an attempt to expand the original purpose of the bank, expand membership to less safe and sound entities subject to less consumer compliance oversight, or to modify the mission in any way that could jeopardize liquidity to members or the financial system I would strongly encourage you to consider the long-term consequences of such action. Social and political agendas promoting home ownership at whatever cost played a significant role in the last housing crisis and our low and moderate income neighborhoods suffered the most as a result. Social and political agendas change rapidly but the safe and sound practices that have sustained the FHLB system have not and should not be impacted by either social or political agendas.

I do believe the systems and processes of the bank can be updated to accept digital signatures on documents. The safety and security around digital signatures was accelerated through COVID and is common practice today. Allowing digital signatures would improve the efficiency of the FHLB as well as member banks allowing member banks to more efficiently serve their communities.

Thank you again for the opportunity to comment on the success of the FHLB system and ways to improve it.